Accountancy: Financial Statements Without Adjustments: Objectives of Financial Statement

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Financial statements are prepared to access the financial position of the business. Mostly, income statements are prepared every year by all business organisations. Income statements is divided into two parts, which are as follows:

  • Trading Account

  • Profit and Loss Account

Income statements are prepared to know the earnings of the concern during a particular accounting year. Balance sheet is prepared is prepared to know the financial position of a business on a particular date.

Financial Accounts

Financial Accounts

Objectives of Financial Statements

  • To Ascertain the financial results of the business activities.

  • To ascertain the financial position of the business.

  • To correct the decision making.

  • To ascertain the cash position of the business

Trading Account is prepared to ascertain the arithmetical accuracy of the business. Which is basically prepared at the end of the accounting year.

Trading Account

Trading Account

Profit and Loss Account

Profit and Loss Account

Developed by: